ITO, Ward - 1(3), Midnapore, Midnapore V. Shri Dhirendra Nath Maity, Paschim Medinipur

ITA 1102/KOL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100159 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 22-08-2011
• Court: TRIBUNAL
• Department Lawyers: SANJAY M UKHERJEE JCITLD
• Assessee Lawyers: NO NE APPEARED
• Keywords: Audit objection; Tax effect
• Section: 147; 143(3)

Judgement Text

ITA NO 1102/KOL/2011-C-AM SRI DHIRENDRA NATH MAITY 1 IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, K OLKATA BEFORE : SHRI MAHAVIR SINGH , JUDICIAL MEMBER, AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 1102/KOL/2011 A.Y 2005-06 I.T.O WARD 1 (3), KOLKATA VS. SRI DHIRENADRA NAT H MAITY PAN: AEYPM6201K (APPELLANT) (RESPONDENT) FOR THE APPELLANT/DEPARTMENT: SHRI SANJAY MUK HERJEE, JCIT, LD.SR.DR FOR THE RESPONDENT/ASSESSEE : NO NE APPEARED DATE OF HEARING: 15-12 -2015 DATE OF PRONOUNCEMENT: 15 -12- 2015 ORDER SHRI M.BALAGANESH, AM : THIS APPEAL OF THE REVENUE ARISES OUT OF THE ORDER OF THE LEARNED CIT(A)- XXXVI, KOLKATA IN APPEAL NO. 841/CIT(A)-XXXVI/KOL/W D.1(3),MID./09-10 DATED 14.6.2011 AGAINST THE ORDER OF ASSESSMENT FRAMED U/ S 147 / 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FO R THE ASST YEAR 2005-06. 2. WE HAVE HEARD THE LEARNED DR AND PERUSED THE MA TERIALS AVAILABLE ON RECORD. IT IS SEEN FROM THE PERUSAL OF THE ASSESSMENT ORDER TH AT THE TOTAL ADDITION MADE BY THE LEARNED AO IS RS. 10,30,000/- ON WHICH TAX EFFECT W OULD ONLY BE RS. 3,18,270/- WHICH IS ADMITTEDLY BELOW THE TAX EFFECT LIMIT PRESCRIBED BY CBDT VIDE CIRCULAR NO. 21 / 2015 DATED 10.12.2015 FOR PREFERRING APPEALS BEFORE TRIBUNAL BY THE REVENUE. IT WILL BE PERTINENT TO REPRODUCE THE RELEVANT PORTION OF THE SAID CIRCULAR NO. 21 / 2015 DATED 10.12.2015 :- ITA NO 1102/KOL/2011-C-AM SRI DHIRENDRA NATH MAITY 2 3. HENCEFORTH, APPEALS / SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER:- S.NO. APPEALS IN INCOME TAX MATTERS MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/- 3 BEFORE SUPREME COURT 25,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE B EEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME I N RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREI NAFTER REFERRED TO AS DISPUTED ISSUES). HOWEVER, THE TAX WILL NOT INCLUDE ANY I NTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED ASINCOME , THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CAS E OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDU CED IN THE ORDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES I N THE CASE OF EVERY ASSESSEE. IF, IN THE CAES OF AN ASSESSEE, THE DISPUTED ISSUES ARI SE IN MORE THAN ONE ASSESSMENT YEAR , APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSE SSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EX CEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONE TARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ON LY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLV ES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), I F IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEED S THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / JUDGEMENT INVOLVE S MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. ITA NO 1102/KOL/2011-C-AM SRI DHIRENDRA NATH MAITY 3 8. ADVERSE JUDGEMENTS RELATING TO THE FOLLOWING ISS UES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT : (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR C IRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN A SSETS / BANK ACCOUNTS. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PEN DING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRA WN / NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE IN STRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 3. ON SPECIFIC QUERY PUT ACROSS FROM THE BENCH TO THE LD. DR AS TO WHETHER THE TAX EFFECT IN THIS CASE IS LESS THAN RS. 10 LAKHS AND W HETHER THIS APPEAL FALLS UNDER ANY OF THE EXCEPTIONS CONTEMPLATED IN PARA 8 OF THIS CIRCULAR. IN RESPONSE TO THIS, THE LD. DR FAIRLY CONCEDED THAT THE TAX EFFECT IS LESS THAN RS.10 LAK HS AND THE CASE DOES NOT FALL UNDER ANY OF THE EXCEPTIONS IN PARA 8 OF THE CBDT CIRCULAR. 3.1 WE FIND THAT INTENTION BEHIND THE CIRCULAR NO.2 1/2015 DATED 10-12-2015 NEEDS TO BE UNDERSTOOD IN THE FOLLOWING PERSPECTIVE:- BY PASSAGE OF TIME, THE MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, NUMBER OF ASSESSES ON THE FI LES OF THE DEPARTMENT HAVE BEEN INCREASED AND CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT IS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CHOKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW OF THE MATTER, THE CBDT HAS RIGHTLY TAKEN A DECISION TO REVISE THE MONETAR Y LIMITS IN TUNE WITH THE PRESENT VALUE OF MONEY AND WITH A VIEW TO REDUCE TH E LITIGATION AND OFFERING ITA NO 1102/KOL/2011-C-AM SRI DHIRENDRA NATH MAITY 4 RELIEF TO SMALL TAX PAYERS. THIS IS ALSO IN VIEW O F THE FACT THAT TIME AND ENERGY OF THE DEPARTMENT COULD BE USED MORE PRODUC TIVELY AND EFFICIENTLY TO CATCH HOLD OF BIG FISHES, WHO IN TURN WOULD CONTRIB UTE MORE TO THE DEVELOPMENT OF THE COUNTRY. 4. ON PERUSAL OF THE CIRCULAR NO. 21 / 2015 DATED 1 0.12.2015 AND THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE PRESENT APPEA L OF THE REVENUE DOES NOT FALL UNDER ANY OF THE EXCEPTIONS CONTEMPLATED IN THE SAID CIRC ULAR. WE ALSO FIND THAT THE CIRCULAR MAKES IT VERY CLEAR THAT THE REVISED MONETARY LIMIT S SHALL APPLY RETROSPECTIVELY TO PENDING APPEALS ALSO. WE FIND THAT THE CIRCULAR IS BINDING ON THE TAX AUTHORITIES. HENCE WE HOLD THAT THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED IN TERMS OF LOW TAX EFFECT VIDE CIRCULAR NO.21 / 2015 DATED 10.12.2015. ACCORDINGLY, THIS BEING A LOW TAX EFFECT CASE, WE DISMISS THE APPEAL OF THE REVENUE I N LIMINE WITHOUT GOING INTO THE MERITS OF THE CASE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.12.2015 SD/- ( MAHAVIR SINGH, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE 15 /12/2015 ITA NO 1102/KOL/2011-C-AM SRI DHIRENDRA NATH MAITY 5 1. . THE APPELLANT: THE I T O WARD 1 (3), MIDNAPORE, AM RAVATI, MIDNAPORE. 2 THE RESPONDENT-SHRI DHIRENDRA NATH MAITY CHHOTO BA ZAR, MIDNAPORE DIST: PASCHIM MEDNIPUR (WB). . 3 / THE CIT, 4.THE CIT(A) 5 . DR, KOLKATA BENCH 6 . GUARD FILE . TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP/SPS COPY OF THE ORDER FORWARDED TO:-